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Tanveer Ahmad Gomal University MBA (B&F) 2nd Term | Rights of unpaid seller 1 Rights of unpaid seller The

seller of goods is deemed to be unpaid (Sec. 45-1) I. When whole of the price has not been paid of tendered. II. When the bill of exchange or negotiable instrument has been received as a condition ofpayment and the condition on which it was received has not been fulfilled by the reason ondishonor of the instrument or otherwise. Features of the unpaid seller I. He must sell goods on the cash basis and must be unpaid. II. If he sells on credit basis, he is not an unpaid seller during the period of credit. III. The term of credit has expired and the price has not been paid to him. IV. He must be unpaid wholly or partially. If a part of price remains unpaid, he is unpaid. V. When the price is paid in the form of negotiable instruments and it has been dishonored. VI. If buyer offers payment and seller refuses to accept, the seller is not an unpaid seller. Example: I. Party A sells a car on cash basis to party B and the price has not been received yet. II. A sells good to B on 5 months credit period and B turns insolvent after 2 months. III. A sells TV set to B on the same day cheque basis, the cheque is dishonored due to insufficient funds. A is an unpaid seller. Rights of an unpaid seller The unpaid seller has following rights. 1)Rights against the goods. i. Rights of lien ii. Right of stoppage of goods in transit iii. Right of rescale 2)Rights against buyer personally i. Suit for price ii. Suit for damages for non-acceptance iii. Suit for special damages and interest Rights of lien The right of lien means lawfully right to retain the goods possession until the full price is received. An unpaid seller can exercise his right of lien in following cases. Sec 47-49

Tanveer Ahmad Gomal University MBA (B&F) 2nd Term | Rights of unpaid seller 2 I. Where the goods have been sold on the cash basis. II. Where the goods have been sold on credit basis and the term of credit has expired. III. Where the buyer has become insolvent even if the period of credit has not been expired. Other rules to satisfy the conditions for this right are I. The unpaid seller must be in actual possession of the goods sold. II. It can be exercised even If the documents of title have been delivered to the buyer. III. It can be exercised for the price and not for other expenses IV. If the seller delivers some goods, it can be exercised on the remaining. Termination of right of lien Sellers right of lien is terminated in following cases. I. When he delivers the goods to the carrier or other bailey for transmission to the buyer II. When the buyer or his agent lawfully obtains the possession of the goods III. When seller waives his right of lien on the goods IV. The right of lien once lost will not be restored V. When the buyer further sells the goods and the seller agrees Example: A seller S sells a TV set to B and delivers it to B and since the TV set was not functioning properly,B delivered it back to S for the repairs. It was held that S can not exercise his right of lien over TV set.

Tanveer Ahmad Gomal University MBA (B&F) 2nd Term | Rights of unpaid seller 2 I. Where the goods have been sold on the cash basis. II. Where the goods have been sold on credit basis and the term of credit has expired. III. Where the buyer has become insolvent even if the period of credit has not been expired. Other rules to satisfy the conditions for this right are I. The unpaid seller must be in actual possession of the goods sold. II. It can be exercised even If the documents of title have been delivered to the buyer. III. It can be exercised for the price and not for other expenses IV.

If the seller delivers some goods, it can be exercised on the remaining. Termination of right of lien Sellers right of lien is terminated in following cases. I. When he delivers the goods to the carrier or other bailey for transmission to the buyer II. When the buyer or his agent lawfully obtains the possession of the goods III. When seller waives his right of lien on the goods IV. The right of lien once lost will not be restored V. When the buyer further sells the goods and the seller agrees Example: A seller S sells a TV set to B and delivers it to B and since the TV set was not functioning properly,B delivered it back to S for the repairs. It was held that S can not exercise his right of lien over TV set. Right of stoppage of goods in transit It means stoppage of goods while they are in transit to take possession until the price is paid (sec. 50-52) Unpaid seller can stop the goods in transit in the following cases. I. While the buyer becomes insolvent II. While the goods are out of actual possession of seller, but have not reached buyers possession i.e. goods are in transit with career. III. The unpaid seller can stop the goods in transit only for payment of the price of the goods and not for any other charges. The unpaid seller can not stop goods in transit in following cases. I. When the goods reaches the destination. II. While the buyer or his agent takes possession of delivery even if it is not reached destination. III. In case the carrier is agent of the buyer, the transit comes to an end the instance carrier receives the goods and seller can not stop the transition IV. Carriers wrongful refusal to deliver goods to the buyer

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